Lumber Liquidators goes public

Tom Sullivan (left), chairman and founder of Lumber Liquidators; and Jeffrey Griffiths, CEO of Lumber Liquidators, pose at the New York Stock Exchange on Nov. 9.

New York Lumber Liquidators, an 111-store hardwood flooring retail chain, made its initial public offering at the New York Stock Exchange on Nov. 9.

The company’s stores are about 6,400 square feet each, and growth that started in metropolitan markets in the Northeast has since spread to suburban and second city markets nationwide. The company is projecting growth of 25 stores in 2007, followed by 30 to 40 new stores per year until 2011.

According to Lumber Liquidators CEO Jeffrey Griffiths, the company now has an approximately 6 percent market share in hardwood flooring. With that projected growth rate -- leading the company to about 300 stores by 2011 -- he said he expects Lumber Liquidators to gain a market share percentage in the mid-teens.

“This is a highly fragmented retail landscape,” Griffiths told HCN. “About 60 percent of the business is done through independent flooring stores whose primary focus is on carpet; another 20 percent is done through the big-box home centers whose primary focus is in the low end of the category. We think this mid-teen market share is a highly achievable goal.”

Lumber Liquidators has seen same-store sales growth of 8.5 percent to 9 percent each quarter this year, Griffiths said. According to the company’s S-1 filing with the Securities and Exchange Commission, in 2006 Lumber Liquidators had sales of $332 million, up 35 percent from sales of $245 million in 2005.

For the first nine months of 2007, the company has shown strength -- sales for the first nine months were $299.8 million, up 21 percent from $247.2 million in the first nine months of 2006.

Griffiths said he believes the company is in a strong position to deal with some of the issues associated with the subprime mortgage market -- the retailer’s primary customer base is existing homeowners, he said, and floors for new home construction make up a much smaller percentage of the company’s sales.